Nigeria’s Sick Refineries…

The Christmas and New Year celebrations that ushered in the year 2001 were special for Ewemade Okosun, a housewife who lived in Osagiede-Uzi, off College Road, in Benin City. She had put to bed a bouncing baby boy before Christmas and even though the celebrations had come and gone, she still received visitors every now and then. But her joy became short-lived one night when she lit her hurricane lamp. An explosion from the kerosene lamp blew her and her entire family to shreds in an explosion that reverberated across the street. Okosun’s two breasts were badly burnt, making her unable to feed her new baby. Two of her children suffered third degree burns but only her husband was spared because he came home late from work. That same night, there were other explosions in the homes of other families in Osagiede-Uzi Street who used kerosene either for cooking or as a source of power. As the night wore on, explosions took place in many homes in Osagiede-Uzi and in several parts of Benin City killing dozens of people and maiming hundreds. A judicial inquiry set up by the Edo State government said that the ‘substandard kerosene’, aka killer kerosene was dispensed to the public by the Nigerian National Petroleum Corporation, NNPC.

The NNPC refused to take responsibility for that tragic incident insisting that as sole importer of kerosene, its statutory responsibility to the nation ended when the product hit the depots around the country. It however paid huge sums as compensations to families affected in Benin City, Edo State, after government and non-governmental organizations heckled it from left, right and centre. However, about than six years later when everyone thought the problem was solved, many Nigerians continued to lose their lives unnecessarily from kerosene explosions, mostly in Warri and Port Harcourt. From July 13 to 24, 2007, official records at the Warri General Hospital said that those who had died from explosions from using kerosene stoves and lanterns were 10. That number paled in significance to what happened in Port Harcourt, Rivers State, at the same time that the kerosene explosions were taking place in Warri. The most telling was the case of Hope Fadee, a 12-year old boy who tried to light a kerosene lamp but lost his father, a pregnant mother and two sisters from an explosion that ensued. After his two legs were amputated from injuries he sustained from that explosion, he eventually died in South Africa where he was taken for medical treatment.

These deaths and hardship could have been avoided if the great majority of Nigerians who need kerosene and petrol have access to the products. Across the land, market women, civil servants, the police and the military as well as students who depend on kerosene and fuel usually queue for hours without either for kerosene for their stoves and lanterns or for petrol for their 950 mini-power generating sets. They suffer untold hardship, humiliation at the hands of filling station attendants who charge them higher than the pump prices if they want to fill a 50-litre jerry can of fuel or kerosene. Recent reports in September in Benin City had it that because of the huge number of Nigerians who throng the NNPC mega station along Sapele Road, Benin City for kerosene, authorities adopted certain measures to contain the teeming crowds. But that strategy broke down, and in the confusion that resulted, Ebenezer Aisien, a 34-year old father of three was shot in the neck by the police. He died on the spot. A lot of Nigerians who are now wary of going to these stations either for kerosene or fuel now prefer to use charcoal or patronize independent marketers who buy the imported product from the NNPC at the Apapa ports in Lagos and sell at sky-high prices to Nigerian consumers. Mama Olabisi, who retails kerosene in bottles in Anthony Village, Lagos, told the magazine that she manages to buy the product from black marketers in Iyana-Ejigbo, a Lagos suburb, and either takes it to the Island or to the Mainland. ‘Filling stations in these places do sell kerosene and this is where I can make a profit’, she said.

Under these conditions, most Nigerians told the magazine that they wished that their four refineries, situated in Kaduna, Port Harcourt and Warri would work as they used to. For instance in January 1991 when President Robert Mugabe of Zimbabwe visited Nigeria, Ibrahim Babangida, IBB, former military president took him to the Port Harcourt Refining Company, PHRC. There, Jubril Aminu, former Petroleum minister, proudly reeled off statistics to the august visitor that the PHRC had exceeded its ‘capacity utilization’, refining capacity of 90 percent by three notches. According to Aminu, the nation realized up to N4billion from that increase in production capacity, for that year alone. Aminu also said that Nigeria was able to make as much as N124 million from exporting nearly 2 million metric tonnes of PHRC’s total production. ‘This means vigilance, organization, high-skilled manpower, discipline and money mostly in foreign exchange’, Aminu had said.

A few years down the line however, that singular moment of national pride had evaporated with the enthusiasm that Aminu and the PHRC generated as a showpiece for Robert Mugabe and the rest of Africa. The PHRC is a $2-billion-government subsidiary, constructed 43 years ago with 60,000 barrels per day, bpd, refining capacity. The old section, which shut down because of a fire incident that destroyed its Crude Processing Unit, CPU, in 1991, needed nearly N200million for it to come back to life. It did not, however, mostly because there were allegations that Soimi Nigeria Limited, the Italian firm that handled the repairs used mostly old parts to effect repairs of the aging PHRC. What necessitated the construction of a new 150,000 bpd ‘integrated grassroots refinery’, still in Port Harcourt in 1985 was that already, there was a shortfall, from the fire incident in PHRC’s ability to meet the nation’s local and export petrol need put at about 445,000 bpd.

Conditions at the Kaduna and Warri refineries are no different however. For almost a decade, there are allegations that both refineries have not worked to full installed capacity. Take for instance the Kaduna refinery, which was commissioned in 1980 to refine about 100,000 bpd in the event of an emergency with the Warri and Port Harcourt. Since 1995 however, the pipes and the entire structure at the refinery are alleged to be gradually rotting away because of the many fire incidences that bedevil the plant. Warri is even worse. With an installed capacity of 125,000 bpd, it barely manages to refine just a quarter of this quota. Senior officials of the NNPC say that this is not entirely the case and they make contrary claims. According to Abubakar Yar’Adua, Group Managing Director of the Nigeria National Petroleum Corporation, NNPC, ‘before the February 2006 vandalism of pipelines at the Chanomi Creeks, the Port Harcourt refinery was producing at 90 percent, Warri refinery was producing at 85 percent, Kaduna refinery was also ‘operating’ at between 75 percent and 80 percent of installed capacity’, he said. At that level of ‘operating’ and producing capacity, all four refineries have the combined capacity to produce 18 million of the nation’s 30 million-litre-per-day consumption. However, nobody among those who spoke with TELL reporter in Warri, including Rabe Abubakar, Joint Task Force, JTF spokesperson could confirm or deny reports that the Chanomi creek had been vandalized yet again. The refineries will be unable to refine if that sensitive creek is attacked, as nearly every oil-prospecting company has one oilrig or the other at that creek, making it a veritable target for attack. For instance, Shell Petroleum Development Prospecting Company, SPDC, has only 245 pipelines in length, NNPC has 421, Texaco 63, and Gulf oil has 134. The others like Mobil and Agip/NNPC have 177 and 274 pipelines respectively.

When TELL visited Warri refinery recently, inside sources told the magazine that even though the refinery was ‘working’, certain sections of the refinery had never been put to use since the WRPC was built in 1988. ‘Warri Refining and Petrochemical plant WRPC, has four sections, namely, the fuel, the hydro-fluoric and poly-propylene plants together with the carbon black plants. The fuel plant is the most important because it has an aero-kerosene and topping units, the reforming and Fluid catalytic cracking, FCC, units’. According to the source, the aero kerosene unit has not produced a single drop of kerosene because of the influence of ‘politics’ and powerful interests who import the Kerosene into the country. The aero kerosene unit which is just at the entrance of the WRPC is now a gigantic edifice of rusting pipes used as a thoroughfare by workers who move from one section of the vast premises of the refinery to another.

The aero kerosene section of the WRPC, and indeed the entire operations of Nigeria’s refineries have experienced hard times. According to information from the NNPC’s Annual Statistical Bulletin, ASB, the year 2005 was the worst year of fire outbreaks at both the WRPC and PHRC, with 35 and 63 cases of fire outbreaks respectively. Nevertheless, from 2000 until date, the PHRC has had over 190 cases of fire outbreaks while the figure for similar incidences of fire from 2000 until 2008 at the WRPC was more than 100. That is not all. The ASB report also recorded that the NNPC refineries and pipelines in Warri, Port Harcourt, Kaduna and Gombe experienced 3, 244 cases of pipeline breaks in 2006 and 2007, ascribing the bulk of the damage to pipeline vandals, and only 20 percent to wear and tear.

Official statements from the NNPC indicate that it has spent more than $739 million on turn around maintenance, TAM, in the last six years. A breakdown of the amount spent ordinarily shows that so-called repairs for the refineries alone gulped more than $485 million, while ‘downstream facilities’ like pipelines and depots took only $254 million. In terms of naira and kobo, N63 billion was sunk in the actual TAM exercises while another N33 billion went into ‘construction of distribution and jetty facilities by the NNPC in Abaji, Escravos and Apapa to facilitate product movement and distribution’, NNPC sources told the magazine. There are sundry allegations that both Total, a French oil firm that worked on the Kaduna refinery for N23 billion, and Chrome, an indigenous oil which got N26 million for the Port Harcourt TAM in 1998, mostly used old parts to replace the old parts that they discarded from the refineries. Apart from all of these, the refineries are bogged down by problems of aging parts that causes many breakdowns and use of locally fabricated parts. At the central workshop of the WRPC where local fabrication of crucial parts of machinery was taking place, TELL reporter saw several broken down pieces of aged and broken down pieces of heavy-duty machinery that he learnt were from a sensitive part of the WRPC.

Aliko Dangote, chairman, Dangote Group, accuses officials of the NNPC of ineptitude and corruption. ‘For the last eight years, the government has given NNPC about $700 million to refurbish the two refineries (Port Harcourt and Kaduna). That money was not properly applied. In addition, even after it was applied, the refineries are still not working. They are worth nothing… there are too many people eating too much money right from importers, right from people within the NNPC that are collecting bribes to allocate products. I am saying that because I know what I am saying…’ he said. Dangote revealed this in an interview as an aftermath of the botched attempt he made together with his Bluestar Consortium to acquire 51 percent interest in both the Port Harcourt and Kaduna refineries in 2007. Dangote’s Consortium that consisted of Transcorp, Zenon Petrol acquired both refineries for $721 million. That event sparked off public outcry, culminating in a national strike action by the National Union of Petroleum and Natural Gas Workers, NUPENG, and PENGASSAN. It eventually led to a Senate hearing where the NNPC GMD alleged that ‘people with money wanted to take them for free’. The NNPC made a solemn promise to the nation after the reversal of the sale of the KPRC and PHRC, that in six months, all of Nigeria’s refineries would bounce back to life. What is still the problem?